The City of Regina administration will release its proposed 2018 budget in just one week. It will include a tax increase, “significant” cost savings and no job losses for permanent staff, the Leader-Post has learned.

“The impact of the reductions in revenue from the province are significant,” City Manager Chris Holden said in an interview. “The budget we’re going to put forward next Thursday is taking a direct approach to get past this revenue shortfall.”

The province’s decision to axe grants-in-lieu payments from Crown corporations is still costing Regina $10.7 million per year. Last year’s city budget, which included service cuts and a 6.49-per-cent mill rate increase, covered 10 months’ worth of the loss — leaving $2.7 million to fill this year.

Holden said other provincial measures will hit the city for the first time in 2018. Regina will no longer earn a fee for collecting the education tax — a $1.9-million loss. The expansion of the PST will also drive up costs by about $2.3 million.

That’s $6.9 million, even before factoring in the unrelenting force of inflation.

In the face of those pressures, Holden said administration will be proposing a property tax hike.

“There will be some mill rate increase,” he said.

A mill rate increase of one per cent brings in about $2.2 million, Holden said. Council has already committed to a 1.45-per-cent increase for road renewal and the new stadium.

But he said his staff have worked hard to keep tax increases “affordable” by finding ways to save money on existing programs and services. Holden gave his departments a mission: Find ways to cut costs by five per cent. He admits they didn’t make the target, but still found enough efficiencies to loosen the fiscal vise.

“We’ve pushed the organization,” he said. “We’ve found a significant amount in savings, which ultimately lessens the impact of any mill rate increase.”

More than half of the city’s expenses come from salaries and benefits. Holden said reducing costs inevitably “has to impact staff.” But he said the proposed budget will keep the disruption “minimal,” with savings coming from unfilled job vacancies and minor adjustments to hours for casual workers.

“There are no permanent staff that are losing jobs,” he said.

Councillors have already gotten a sense of the broad outlines of the proposal. Coun. Barbara Young said it meets her main priorities: To preserve core services, uphold community safety and keep tax increases affordable.

“This is a budget that I think I can live with,” she said.

Young said the budget doesn’t do a lot to to advance the city’s long-term plan, but she blamed that on the province’s budget cut.

“Would I like to see more happening? Of course,” she said. “We certainly can’t do what we would like to do, but I think we can hold the line.”

She said she will sound out her constituents before voting at the special budget meeting on Feb. 27.

That meeting will see councillors debate the administration proposal and decide whether to further rein in tax hikes by reducing service levels. But councillors who spoke to the Leader-Post seemed unwilling to go far in that direction.

“I’m more interested in avoiding service cuts than having to pick and choose,” said Coun. Bob Hawkins. “The sweet spot is in trying to preserve services and keep mill rates as low as possible.”

Coun. John Findura said he wants to focus on efficiencies, not service cuts.

“We have to maintain services,” he said. “Citizens depend on us to do that, but at the same time we have to look at that in a cost-effective way.”

Mayor Michael Fougere said many of those moves were “painful” for residents. He hopes some programs will be “back on the table for reinstatement” in this year’s debate — particularly hazardous waste. Like Findura and Hawkins, he was not favourable to the idea of service level reductions.

“I don’t think that’s what we’re elected to do,” the mayor said, “and I just don’t see that happening.”

Fougere said it’s essential to ensure the city keeps strengthening its infrastructure, and that it invests in community safety and housing programs.

Hawkins said his top priorities are essentially the same — roads and housing. He also mentioned recreation programs as an important area to protect.

Saskatchewan will soon have a new premier, and the city will face another provincial budget in the spring. Young said that could be a “fly in the ointment,” with renewed cuts upending the city’s best-laid plans just months after they’re passed in council.

But Holden said he’s “optimistic” about what a new premier will do.

“I think there’s been enough conversations between elected officials,” he said. “We don’t anticipate that there will be any further reductions in revenue to municipalities beyond what we know.”

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